Exhibit 99.1
** NEWS RELEASE **
HOT TOPIC, INC. REPORTS FEBRUARY COMP STORE SALES UP 0.2%
AND RESTATEMENT TO CHANGE LEASE ACCOUNTING
CITY of INDUSTRY, CA, March 2, 2005 -- Hot Topic, Inc. (Nasdaq National Market:
HOTT) today announced the following sales results for the month of February
(ended February 26, 2005):
Comparable Store
Net Sales Sales % Change
This
$ Millions % Increase Year Last Year
---------- ---------- ---- ---------
February $46.0 16% 0.2% 7.6%
The Company also stated that, based upon review with its audit
committee and consultations with its independent auditors, it will restate its
consolidated financial statements for certain prior periods to reflect changes
related to lease accounting. The Company previously reflected the unamortized
portion of construction allowances as a reduction of capital expenditures, but
will adjust to record those transactions as a deferred rent credit. In addition,
the restatement will include a change in the manner in which the Company has
accounted for rent expense to include the store build-out period used primarily
for construction activities prior to the commencement of new store operations.
Previously, the Company did not include the period prior to opening a new store
in its calculation of straight-line rent expense.
Hot Topic estimates the restatement will reduce earnings per diluted
share by $0.01 for each fiscal year 2004, 2003 and 2002. In addition, the
Company estimates that earnings per diluted share will be lower by approximately
$0.01 in fiscal 2005.
The Company reiterated that it is comfortable with the consensus
earnings per diluted share of $0.38 for the fourth quarter of 2004. Including
the interim periods of 2004 that will be restated, the full year 2004 earnings
guidance is $0.83 per diluted share. Based upon the restatement of 2004, the
Company is revising its guidance for the first quarter of 2005 to $0.11 per
diluted share, consistent with consensus earnings estimates.
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For more detailed information on February sales results, please call
626-709-1209 to listen to a recorded commentary. Additionally, a conference call
to discuss fourth quarter results, business trends and other matters is
scheduled for March 16, 2005 at 4:30 PM (ET). The conference call number is
800-370-0869, and will be accessible to all interested parties. It will also be
webcast at www.companyboardroom.com. A replay will be available at 877-519-4471,
pass code 5620263, for approximately two weeks.
Hot Topic, Inc. is a national mall-based specialty retailer. Hot Topic
offers apparel, accessories and gifts to young men and women principally between
the ages of 12 and 22. Torrid, the Company's second concept, provides plus-size
fashion-forward apparel and accessories that target young women principally
between the ages of 15 and 29. The Company currently operates 596 Hot Topic
stores in all 50 states and Puerto Rico, 77 Torrid stores, and Internet stores
www.hottopic.com and www.torrid.com.
In addition to the historical information contained herein, this news
release contains forward-looking statements, which include statements relating
to financial results, guidance, projections and other financial performance, and
managing growth. These statements involve risks and uncertainties, including
risks and uncertainties associated with meeting expected financial results,
management of growth, relationships with mall developers and operators, the risk
that available cash or mall space will not be adequate for planned expansion,
fluctuations in sales and comparable store sales results, risks and
uncertainties with respect to new store openings including risks associated with
the Company's new store concepts and Internet stores, music and fashion trends,
competition from other retailers, uncertainties generally associated with
specialty retailing, the effect of economic conditions, the effect of severe
weather or natural disasters, political and/or social changes or events that
could negatively impact shopping patterns and/or mall traffic as well as other
risks detailed in the Company's SEC reports, including its Quarterly Reports on
Form 10-Q and its Annual Report on Form 10-K for the year ended January 31,
2004. Historical results achieved are not necessarily indicative of the future
prospects of the Company, and actual results or circumstances could differ
materially from the forward-looking statements.
Contact:
Hot Topic, Inc., City of Industry, CA
Mr. Jim McGinty, CFO 626-839-4681 x2675
Ms. Megan Hall, Manager of I.R. 626-839-4681 x2173
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